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Coming of age of the CPO

Amit Paul Babu
July 18, 2008

Coming of age of the CPO

Business process, knowledge, HR, recruitment, legal process -- there is an opportunity to outsource to third party units in almost every area, and creative requirements are not far behind. Getting creative is the latest mantra of the outsourcing industry. Medium to large sized companies and design agencies in USA, Europe, Canada, and Australia are increasingly looking at CPO to achieve results at a fraction of the cost they would incur in getting the same work done locally. Where some of the work needs to be done by designers with an understanding of the local consumer, majority of the design and print jobs can be outsourced to reduce costs.

It is no more all about call centers, telemarketing, transaction processing. There is a new dimension to it, creative outsourcing, that includes animation, developing gaming content and e-learning and e-publishing. Creative outsourcing is creation of original content. Content is present in many forms journals, books but making that content visually interactive and intelligent is creative outsourcing. Conservative estimates put the industry in the range of $300-400m, excluding the captives, with a growth rate of 30-50%.

By outsourcing their creative business processes, clients additionally benefit from customised creative services technology solutions including digital asset management, brand identity management, project management, timekeeping, and charge-back solutions. Service delivery models are tailored to each client and are based on best BPO practices, including quality initiatives, and contractual incentives and penalties tied to results.

Industry analysts, Gartner Dataquest and Nelson Hall, continue to predict dramatic growth in BPO over the next few years. Morgan Chambers has also reported that in the UK, alone, BPO services account for over £5.9bn of revenue in the FTSE100 and this is likely to grow between 22 and 30% per year.

The e-learning space currently employs about 30,000-40,000 people. In next five years, this number is expected to be 1,00,000-1,50,000. Clearly, there will be a dearth of skilled labour over the next few years. To join this new lucrative career, one has to have a flair for writing and good English skills.

A fresher in the e-learning industry can earn anywhere between Rs 10,000-12,000 a month, while an experienced person can start with Rs 20,000-25,000 monthly and can go up to Rs 1,00,000.

In the gaming industry though, outsourcing is driven by the cost, the cost of developing a game for a PC/console abroad is $10-13m. However, a similar game can be developed in India for one fourth of the cost. Interestingly, when the cost of game development started to go up, the developers started looking for alternative destinations. India emerged as a preferred destination because of low cost and good quality. Unlike the e-learning industry, gaming industry faces acute shortage of skilled professionals. It employs about 4,000-5,000 people, but the demand is estimated to be in tens of thousands, industry observers estimate. A fresher in this industry can start from Rs 8,000 a month and can go up to Rs 15,000, while an experienced developer can earn as much as Rs 60,000.

In the creative outsourcing space --- animation, gaming and e-learning --- India is now facing stiff competition from China, Philippines, Korea, Thailand, Canada, Ukraine and Russia. The roadblock, industry observers feel, is the absence of a local partner in the foreign markets from where the major chunk of work comes. India is now getting work from the US, Europe and Far-East.

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